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What We Talk About When We Talk About Tax Exemption, Philip Hackney Jan 2013

What We Talk About When We Talk About Tax Exemption, Philip Hackney

Articles

Under the Internal Revenue Code, certain nonprofit organizations are granted exemption from federal income tax (“tax-exemption”). Most tax-exemption rationales assume tax-exemption is a subsidy for organizations such as charities that provide some underprovided good or service. These theories assume there should be a tax on the income of nonprofit organizations but provide no justification for this assumption. This article contributes to the literature by examining the corporate income tax rationales as a proxy for why we might tax nonprofit organizations. The primary two theories hold that the corporate tax is imposed to: (1) tax shareholders (“shareholder theory”), and (2) regulate …


The Attack On Nonprofit Status: A Charitable Assessment, James R. Hines Jr., Jill R. Horwitz, Austin Nichols Jan 2010

The Attack On Nonprofit Status: A Charitable Assessment, James R. Hines Jr., Jill R. Horwitz, Austin Nichols

Articles

American nonprofit organizations receive favorable tax treatment, including tax exemptions and tax-deductibility of contributions, in return for their devotion to charitable purposes and restrictions not to distribute profits. Recent efforts to extend some or all of these tax benefits to for-profit companies making social investments, including the creation of the new hybrid nonprofit/for-profit company form known as the Low-Profit Limited Liability Company, threaten to undermine the vitality of the nonprofit sector and the integrity of the tax system. Reform advocates maintain that the ability to compensate executives based on performance and to distribute profits when attractive investment opportunities are scarce …


Does Nonprofit Ownership Matter?, Jill R. Horwitz Jan 2007

Does Nonprofit Ownership Matter?, Jill R. Horwitz

Articles

In recent years, policymakers have increasingly questioned whether nonprofit institutions, particularly hospitals, merit tax exemption. They argue that nonprofit hospitals differ little from their for-profit counterparts in the provision of charity care and, therefore, should either lose their tax-exempt status or adhere to new, strict, and specific requirements to provide free services for the poor. In this Article, I present evidence that hospital ownership-whether it is for-profit, nonprofit, or government owned-has a significant effect on the mix of medical services it offers. Despite notoriously weak enforcement mechanisms, nonprofit hospitals act in the public interest by providing services that are unlikely …


The Common Law Power Of The Legislature: Insurer Conversions And Charitable Funds, Jill R. Horwitz, Marion R. Fremont-Smith Jan 2005

The Common Law Power Of The Legislature: Insurer Conversions And Charitable Funds, Jill R. Horwitz, Marion R. Fremont-Smith

Articles

New York's Empire Blue Ccoss and Blue Shield conversion from nonprofic cofor­ profic form has considerable legal significance. Three aspects of the conversion ma.ke checase unique: the role of the scace legislature in directing the disposicion of the conversion assets, che face chac it made itself che primary beneficiary of chose assets, and the actions of che scace attorney general defending the state rather than che public inceresc in che charitable assets. Drawing on several cenruries of common Law rejecting the Legislacive power to direct the disposition of charitable funds, chis article argues chat the legislature lacked power cocontrol che …


Why We Need The Independent Sector: The Behavior, Law, And Ethics Of Not-For-Profit Hospitals, Jill R. Horwitz Jan 2003

Why We Need The Independent Sector: The Behavior, Law, And Ethics Of Not-For-Profit Hospitals, Jill R. Horwitz

Articles

Among the major forms of corporate ownership, the not-for-profit ownership form is distinct in its behavior, legal constraints, and moral obligations. A new empirical analysis of the American hospital industry, using eleven years of data for all urban general hospitals in the country, shows that corporate form accounts for large differences in the provision of specific medical services. Not-for-profit hospitals systematically provide both private and public goods that are in the public interest, and that other forms fail to provide. Two hypotheses are proposed to account for the findings, one legal and one moral. While no causal claims are made, …